Cancel additional allocation to NMDC, MML: Miners urge SC

The Federation of Indian Mineral Industries (FIMI) has urged the Supreme Court to dispense with the ad hoc additional mining lease allocation granted to NMDC and MML over and above their maximum permissible annual production (MPAP) with immediate effect.

FIMI has also requested the court that the overall district-wise ceiling on production be commensurate with the aggregate MPAP of all the lessees in Chitradurga, Tumkur and Bellary districts. Industry representatives believe that this will increase transparency in pricing and will remove NMDC’s monopoly, which affects pricing. During the mining ban in Karnataka, NMDC and MML were allocated additional production limits on an ad hoc basis under extraordinary circumstances, in order to meet the needs of the steel industry.

The MPAP permitted to NMDC and MML under their reclamation and rehabilitation (R&R) plans were 9.50 million tonnes (mt) and 1.06 mt, respectively. An additional allocation of 2.50 mt to NMDC and 3 mt to MML made the total permitted annual production 12 mt for NMDC and 4.06 mt for MML.

FIMI wanted the redistribution of the CAP among other miners in the three districts of Karnataka (Chitradurga, Tumkur and Bellary) be done on three parameters, namely dumping capacity, R&R plans and infrastructure facility. However, the minimum of all these parameters would be considered in order to fix the CAP for each miner. This is suggested by FIMI on the grounds that sustainable development can alone maintain the development and ecological balance.

The other possible repercussion of the reduction of the CAP for NMDC and MML would be that the quality of production might deteriorate which could occur either through lower production of high-grade ore or owing to discrepancies in the lumpsand fines ratio. Reduction of the CAP would also increase the cost ofproduction for NMDC and MML. As the quality will go down and cost ofproduction will go up, which will result in a business slowdown for SAIL, and as the capacity is being scaled down, it will affect the quality of steels mills.

Basant Poddar, former chairman and member, FIMI-South, said equitable distribution of quantities based on the MPAP on a microscopic mechanism will certainly maintain a balance in the environment, the load on infrastructure, intergenerational equity and as well as ensuring all follow the same principles driven by scientific mining. A stress-free environment is possible to be achieved in this equitable distribution. Also, Karnataka has been importing iron ore which is hugely carbon negative and environment unfriendly, he stated as reasons behind FIMI's submission. iThe CEO of the one of the big miners in  the Karnataka region said that during the mining ban additional CAP was allotted to NMDC and MML mines on an ad hoc basis, without considering the implications on the  environment and intergenerational equity.

He added if the CAP is removed then the PSUs’ share would come down from 60 per cent to 50 per cent, while the private miners’ share will rise to 50 per cent. This would lead to market transparency when it comes to pricing, he added.

Additional CAP allocation to other miners would make the raw material available for the domestic steel industry, which has a vision of 300 MT by 2030, apart from creating more employment opportunities, he said.  After the mining ban was lifted, miners have improved mining infrastructure, dumping capacity and have submitted R&R reports for sustainable mining.